Union bosses are calling for an urgent meeting with Scottish First Minister Nicola Sturgeon amid uncertainty surrounding the future of the Grangemouth oil refinery.
Grangemouth is one of six oil refineries in Britain and supplies two-thirds of the petrol and diesel for the forecourts in Scotland as well as large volumes for the north of England and Northern Ireland.
Located in Falkirk, Scotland, it is owned by Petroineos, a joint venture formed in 2011 between Chinese oil giant PetroChina and Ineos, part of billionaire Jim Ratcliffe’s petrochemical empire.
City sources said PetroChina wanted to sell its stake. However, there are fears that the company will fall into receivership if no buyer is found.
PetroChina is responsible for most of the refinery’s financing needs, which suffered significant losses during the pandemic as demand for oil plummeted. The Unite union has requested meetings with Sturgeon and Alister Jack, the Secretary of State for Scotland, to discuss the situation and whether the government may need to step in to save jobs.
About 2,000 people are employed at the Grangemouth site, including 600 within the refinery itself. Refining has taken place in Grangemouth since 1919.
Pat Rafferty, Scotland’s Unite secretary, said the union had been told there was “no threat of significant sale or restructuring”. But he added: “We believe that in light of the site’s strategic national importance to UK energy needs, and in the context of our reduced exposure to Russia, it would be diligent to assess potential scenarios involving changes to the Grangemouth oil refinery.”
In November 2020, Grangemouth reduced its processing capacity from 210,000 barrels per day to 150,000.
As a result, Petroineos Manufacturing Scotland recorded an impairment charge of £44.7 million. In its latest accounts, losses rose to £89.9m in 2020 from a loss of £26.1m in 2019.
In last week’s Queen’s Speech, the government proposed passing the Downstream Oil Resilience Bill, which grants the state the power to intervene if there are signs that there could be an interruption in the fuel supply.
Rafferty added: “Any development at Grangemouth would fall within the realm of these powers projects. The Scottish Government also has a major role to play in these potential scenarios in relation to Grangemouth, which is why we have requested an engagement with the First Minister and Secretary of State for Scotland to discuss alternative scenarios, and what that might mean in terms of government support.
Petroineos could not be reached for comment.